Usdjpy Losses Sma On Daily Chart

 Usdjpy Losses Sma On Daily Chart

USD/JPY Losses Steam Near 200 SMA On Daily Chart

The USD/JPY pair bounced higher during Friday's session, making it one of the first significant gains in the last 7 days. The recent bounce in the USD/JPY also hints toward some short-term correction as well.

The Dollar/Japanese Yen pair retreated from 145.06, which was the 2023 high amid bearish pressure on the US Dollar. In addition, the fundamental outlook of the US Dollar is also not strong as the signs of the Fed tightening cycle coming to an end have also increased.

If we look at the technical outlook, the retracement was slightly over the 50% fib retracement if we measure the bull leg from 129.64 to 145.06. Looking ahead, the pair will likely face strong resistance as it approaches the convergence point of the 200 and the 100 SMA on the daily chart.

USD/JPY Daily Chart Is Deeply Oversold

Speaking from a purely technical point, the USD/JPY is showing signs of deeply oversold conditions if we look at the D1 chart. In addition, the profit-taking before the weekend will also push the pair higher. Just this week, the USD/JPY pair lost 3.5% of its value, so a minor correction is highly likely this time.

The price action that took place on Friday has formed a hammer candlestick which is also considered a strong reversal signal. However, the pair must close above the 138.44 level in order to validate the recent pullback & to pave the way for recovery.

The USD/JPY bulls will be eyeing the 139.08 level, where the 23.6 Fib retracement is present. But for a strong momentum, a close above 140.00 will be required to signal a reversal.

On the contrary, the bearish theme remains strong as the pair is already going through consecutive weekly losses.

For now, the important resistance levels for USD/JPY are 138.24, 138.95, and 139.71. Similarly, the support levels are 137.08, 136.50, 136.14, and 135.78. Once the markets open on Monday, these levels will be closely watched by the USD/JPY traders for directions on what's about to happen next.

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